7 Financial Goals For Your 30s
Published: August 24, 2015 | Updated: July 23, 2021 | Posted by: Bea Bongat | Personal Finance
60% – that’s the salary growth both men and women see by the time they reach 30 according to a Payscale study With higher wages and more than a decade into the workforce, those in their 30s have more opportunity to make the most of their finances. You’ve already ticked off eradicating non-mortgage debt and starting an investment account, but the road to financial independence is far from over. You still have roughly thirty years until retirement. Are you unsure of what to do next? Or do you want to get a second opinion to make sure you’re doing the right things? Look no further.
Moneymax.ph rounded up seven financial goals for your 30s. Let this checklist be a guide to help you stay on track and bulk up your finances.
Table of Contents
Build a larger cash reserve
If you haven’t updated your emergency fund, it’s time to do so. At this point in your life, your expenses have shot up. You’ve moved out of your parents’ home. Your savings may have taken a dent due to the wedding extravaganza, and the costs to raise the light of your life, aka Junior, never ends. Re-compute your monthly expenses, multiply by six, and that’s your new emergency fund target.
Write your will
It’s never too early to write a will, especially during turning points in your life such as getting married or buying a house. Leaving your loved ones and dependents without a will is not only stressful on finances but on legal proceedings and emotions as well.
Having a will gives you the peace of mind that your loved ones will be taken care of when unforeseen events happen. In this regard, it’s important to update your will when certain events happen, such as an increase in assets or more offspring. If you want to know more on wills and other related documents such as trusts and a power of attorney, read this article: Before Resting in Peace: 6 Ways to Plan Your Legacy.
Invest in property
When you reach your 30s, you have more assets and a larger income than when you were starting out. You can now invest in property holdings. Real estate is one of the best investments you can make since property most likely appreciates, especially if you have a long time horizon. Also, there are multiple ways to make your money grow through real estate. Stay tuned next week for an article focused on this.
Even if you see the property as a home where you will raise your kids until you retire instead of a pure investment vehicle, it’s still a good financial move. By the time your offspring raise their own families and move out, you can sell your home and move to a smaller space. By selling the home you’ve held for decades, you’ll get a large cash reserve in the millions.
Ramp up and rebalance investments
When you were younger, you opened that investment account with only Php 5,000. Now that you’re earning more, you have greater purchasing power. A decade ago, time was your best ally (thank you, compound interest). Now, pair time with a larger disposable income. Ramp up your investment contributions and reap the gains. A 10% return on investment (ROI) on Php 5,000 is Php 500, but if your investment of Php 100,000 earns 10%, that’s Php 10,000. Put the extra money in your investments instead of spending it, and your future self will thank you.
Don’t forget to rebalance your investment portfolio now that you’re closer to retirement. With more expenses to consider, such as your mortgage payment or your child’s tuition, you can’t be as risky as you were back when you had lesser responsibilities. For retirement, John C. “Jack” Bogle, founder of the investment management company The Vanguard Group, recommends “roughly your age in bonds and the rest in stocks.”
If you want to know more about the best investments for your goals (e.g. wedding, tuition, retirement), let Marvin Fausto show you how.
When you were in your 20s, you felt unstoppable. You didn’t have any dependents and you were earning just for yourself. You didn’t see the use of health insurance because you’ve never been hospitalized before nor the need for life insurance because you didn’t have dependents.
Now that you’re in your 30s, reassess the types of insurance you have. If your spouse’s health insurance has better coverage than yours, you can let go of yours and be his/her dependent. Also, consider that health issues will arise as you grow older. Especially if you’re the breadwinner, you may need to consider Disability or Accident insurance. This ensures that your family will be protected when events arise that disables you and hinders you from working. If you have a child, update your life insurance policy and include your kid.
In your 30s, you have more assets and responsibilities that need protection and stability, be it home or car insurance. Insurance protects you and gives you and your loved one’s peace of mind when unforeseen events arise.
Save for your children
Do your parents enjoy telling you how you can buy Coke for less than a peso during their time? Soon enough, you’ll be the one telling your children how costs have risen because of inflation. This is why it’s good to give your offspring a head start in the finance department. Whether it’s for their tuition or other expenses, it’s best to start saving up for your child’s future. A year at the Ateneo costs Php 178,000. In 2025, with a 5.7%* inflation rate, the cost will rise up to Php 309,000. In order to combat inflation, it’s time to ramp up your investments as mentioned above.
Before setting aside savings for your child, however, make sure you’ve seen to your own savings first. You are closer to retirement than your child is, so save for yourself first and foremost. Then you can save for your child.
*Inflation rate is reported by the National Statistics Office of the Philippines. Future values are estimations.
Advance your career
In your 30s, you have around a decade of experience in your profession, but at the same time, you still have much to accomplish. Whether it’s gunning for a coveted senior management position, leaving the corporate world and starting a business on your own, or even going back to school for higher studies, your career track is far from finished.
At this time of your life, continue developing your skillset and stay relevant whether it’s through taking a postgraduate degree or a short certificate course. If you don’t have the time and finances, opt for free massive open online courses (MOOCs) which can boost your workplace skills. A boost in pay or a step up the career ladder is always good for your finances. Just be sure to avoid lifestyle inflation and keep your budget in check.
It may feel like the challenges and goals never end, but all these are for a brighter and stress-free future. Keep track of the seven goals above to get you further on that road to financial independence. Even better? If your finances surpass your target goals thanks to smart decisions (aka investments), you may even be able to retire early.